The project report from developing & manufacturing of battery operated cost at

TATA motors
1) About the TATA motors-

2) Objective- tata motors planning to introduce battery operated cars in the segment of tata indica,
hexa. The company estimates that with the govt push on the clean energy India will be requiring min
50lac cars every year from the year 2021-22. Presently tata motors has market share of 14% in this
segment. However, tata motors wants to have a market share of 20% in electric cars.

3)a) Project description- company plans to have a new plant in sanand, Gujrat, where tata motors has
existing plant for tat nano. Company feels that with the decrease in demand for tata nano 1 plant of
nano can be used for developing the EV. The tata motors conducted the survey & found out under the
chairmanship of S Chandrashekar, MD of the comp that they will require 300Cr for upgrading the nano
plant for EV. The company does not have expertise in the field of EV hence they entered into agreement
with tesla who will be paid 10% of sales price as royalty for next 5yrs with the conditions of 1000 cars
per year.

b) Raw material requirement – the comp will require Raw Material worth 3lac for indica & 5lac for hexa
per car. Out of this RM 50% will be paid for the battery which will be procured from Exide india (for
which an agreement is already signed). Exide is under obligation to provide min of 80% of battery
requirement from their resources & 20% on own guarantee from other vendor. For this existing labor of
nano will be used which will be at an expenditure of 50k per car. However, an additional expenditure of
20k per car need to be incurred.

c) Target production & customer – the company wants to produce 1lac units of EV which will in the ratio
of 60:40 for indica & hexa. The company also feels that this production also needs to be increased by
20k by next 2yrs then 30k per year. The target population for this will be middle & upper middle class
consumers in the urban areas. Company also feels that it will have a good market presence because of
wide network across India.

d) Layout- Company shall require area of 50k sq yard as work shed & 20k sq yards as storage. The total
cost will be 100Cr. The company will require fuel & water at a fixed rate of 15k per car. Company will not
have a problem skilled & unskilled labor as they are in auto business for more than 50yrs. Company feels
an average demand of 1lac units & than company will require to produce 20k more units every year.

e) Marketing Plan- company wants that it shall cars for urban middle class white collar customers.

f) target market- comp is confident that it be able to achieve the targets with the help of wide
distribution network of tata motors & its brand. Market will be segmented into lower middle & middle
class consumers having salary of 50-75k, more than 1lac per month

g) Future prospects- company is confident of future prospects of this project because of 2 reasons-
1) govt legal compulsion for introducing energy efficient & clean energy vehicles keeping the pollution
level low & Supreme Court orders

2) company shall be able to make this EV a grand success because of the environmental issues &
awareness among customers

3) Company shall be able to achieve market share of 20% within 5yrs. It means FY 26-27.

4) Global market expansion during this period company will be able to look after the global market after
3yrs after their launch.

h) Capital structure & operating cost- company will require addition cost of 100Cr to implement this
project out of this comp plans to have 200Cr debt from SBI & HDFC bank @ of 14%. Company also feels
that it can get a ECB due to its resources in European market in Indian currency @8%, remaining 200Cr
will used from reserves & surplus of the comp. company has an opportunity cost of 20% in nano but in
case of EV they want to have 25%. Company propose to have sales price of 8lacs indica & 11lacs for
hexa. The govt will give a direct subsidy of 20% to the buyers which will traditional & new car owners of
EVs. Comp also wants to have 100Cr reserves for providing battery charging facilities in their showrooms
in Mumbai, dlehi, chandigrah, lucknow, pune, Bhopal, Chennai, Ludhiana, Gurgaon amristar within next
1yr. comp plan to launch this car in Diwali season 2021. Detailed financial analysis of NPV, IRR & BEP is
given below.

i) The management – tata motors has a very rich experience of manufacturing & distributing tata cars
since many decades. The promotors have their brand in itself. For the new project team under S.
Chandrashekar, MD, who has more 30yrs of experience an IIM grad shall lead this team. Company will
use the man power of nano plant however will hire the labor of other labor & fresh electrical grads from
regional engineering colleges.

j) Competition in industry- company will have competition from maruti, Hyundai, honda. But they will
maintain place in industry for EV also like their traditional vehicle

k) CSR- company has always fulfilled its responsibility towards its society so tata motors will provide 1%
of the sales price for the development of rural areas near sanand. It will be used for school education